TCS Reports 8.2% Profit Growth, Led by Emerging Markets
India’s largest software exporter, TCS, announced an impressive 8.2% growth in net profit for the December quarter, reaching Rs 11,735 crore. This growth was driven by strong double-digit growth in emerging markets, with India leading the way. TCS also reported a 4% increase in revenue for the quarter, amounting to Rs 60,583 crore.
The company’s performance was particularly robust in the energy, resources, and utilities sector, which witnessed an 11.8% growth. Manufacturing also saw a significant increase of 7%, while the life sciences and healthcare sector grew by 3.1%. On the other hand, the consumer business group reported a slight decline of 0.3%, while the BFSI sector experienced a 3% decrease. Communications and media saw a dip of 4.9%, and technology and services declined by 5.0%. Regional markets, however, showed substantial growth of 19.2%.
TCS attributed its success to its well-diversified portfolio and customer-centric strategy. The company’s CEO-MD, K Krithivasan, expressed confidence in their business model, which has provided them resilience during a seasonally weak quarter with macro-economic headwinds. He also highlighted the strong deal momentum across markets, leading to a solid order book that ensures long-term growth.
TCS has been actively exploring the potential of Generative AI, leading to tremendous interest from its customers. The company spearheads innovation and exploration in this area, aiming to deliver cutting-edge solutions to its clients.
From an operational standpoint, TCS reported improved operating margins, which rose by 50 bps to 25%. Net margin stood at 19.4%. The company’s order book currently stands at $8.1 billion, showcasing its positive performance and bright outlook.
N Ganapathy Subramaniam, the COO and ED of TCS, highlighted the company’s impactful contribution to projects of national importance and its execution strength. TCS’s products and platforms also had a successful quarter, witnessing new wins and go-lives. The MCX platform, specifically, has scaled well, processing record transaction volumes. TCS is also making significant progress in upskilling its employees in Generative AI through its AI playground platform.
TCS boasts a diverse workforce, with women comprising 35.7% of its employees. As of December 31, the company had a total workforce of over 603,000 employees. Additionally, TCSers have clocked an impressive 39.7 million learning hours and acquired 3.7 million competencies, including 515,000 high-demand skills.
Samir Seksaria, the CFO of TCS, highlighted the company’s disciplined execution and operational rigor, which drove strong improvement in margins despite seasonal headwinds. He emphasized the importance of strategic investments in people, innovation, and infrastructure to differentiate TCS and create long-term value for stakeholders.
TCS experienced an attrition rate of 13.3% for the last 12 months in its IT services division. The company has already commenced its campus hiring process for the upcoming year, and its chief HR officer, Milind Lakkad, expressed hope that TCS would return to its normal operating mode by the end of the current fiscal year.
In conclusion, TCS’s strong financial performance in the December quarter, supported by robust growth in emerging markets, has showcased the company’s resilience despite challenging economic conditions. With a well-diversified portfolio, a customer-centric approach, and a focus on innovation, TCS is well-positioned for continued success in the global software services industry.
Note: The information provided in this article is based on TCS’s official announcement and financial statements.
